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Public Perceives Supreme Court Justices As Biased Over ACA’s Legality

Monday, February 6th, 2012

Approximately 60 percent of Americans believe that the Supreme Court justices who will hear the Patient Protection and Affordable Care Act (ACA) will base their judgments more on personal ideology than a legal analysis of the individual mandate, according to a recent Kaiser Family Foundation poll.

Only 28 percent believe the justices will base their decision on the mandate without regard to politics and ideology.  The poll also asked about general views of the Supreme Court and found that 75 percent of the public believe that justices sometimes let their personal politics sway their decisions.  Seventeen percent said justices more often than not decide cases based on legal analysis.  The court is expected to hear oral arguments in March in a case brought against the Patient Protection and Affordable Care Act (ACA) by 26 states.

The Kaiser poll found that the individual mandate, a requirement that most Americans purchase health insurance by 2014 or pay a fine, remains unpopular — 67 percent of Americans opposed the provision and just 30 percent supported it.  Overall, approximately 37 percent of Americans view the health law favorably, while 44 percent have an unfavorable view.

In terms of the “repeal and replace” agenda that House Republicans are pursuing, it’s not really winning over the public.  According to the Kaiser poll, 50 percent of respondents would prefer to expand the law or keep it in place; just 40 percent want to repeal it outright or replace it with an alternative.  That could be a problem, since House Energy and Commerce Health Subcommittee Chairman Joe Pitts said that a “replace” plan is on the subcommittee’s to-do list, at approximately the same time that the Supreme Court is expected to rule.  Pitts hopes that his caucus will be able to seize the opportunity to sway public opinion: “We’ll have a window of opportunity to — with everyone looking — to explain that the Affordable Care Act is not fully implemented yet.  A lot of people think it is.  So we’ll use that opportunity in that window to discuss the full ramifications of the Affordable Care Act and what we’ll replace it with.”

For example, Justice Elena Kagan (who was Solicitor General at the time the ACA was passed and has recused herself from the Supreme Court case) and noted Supreme Court litigator and Harvard Law Professor Laurence Tribe, who worked for the Justice Department at the time, had an email exchange in which they discussed the pending healthcare vote.  “I hear they have the votes, Larry!!  Simply amazing,” Kagan wrote to Tribe in an email.

“So healthcare is basically done!” Tribe responded to Kagan.  “Remarkable.  And with the Stupak group accepting the magic of what amounts to a signing statement on steroids!”  The “Stupak group” refers to then-Representative Bart Stupak (D-MI), who masterminded a group of House Democrats who had indicated they would not vote for the ACA if it permitted federal funds to pay for abortions.  Ultimately, Stupak and his allies voted for the bill, even though no additional language was added that would prevent federal funding for abortions.

Writing for KSL.com, contributor Curt Mainwaring muses on what will happen if the Supreme Court upholds the ACA. “If the Supreme Court rules that ACA is constitutional, healthcare costs will likely continue to rise — although at a slower rate than if the law were determined to be unconstitutional.  Healthcare costs currently make up approximately 18 percent of gross domestic product.  If expenditures continue on their current trajectory, ‘the share of GDP devoted to healthcare in the United States is projected to reach 34 percent by 2040.’  In more intimate terms, the Department of Health and Human Services demonstrates individuals paid approximately $1,000 per year in healthcare costs in 1960, more than $7,000 per year in 2007, and are projected to pay more than $13,000 per year by 2018.

“Simply put, this kind of a rise in healthcare costs is unsustainable — and these kinds of projections are part of the reason ACA was created in the first place.  Nevertheless, claims of ACA’s positive impact on the economy have likely been overestimated.  ACA focuses heavily on reducing the cost of health insurance — a factor that will likely result in reduced insurance costs.”

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Will the ACA Survive the Supreme Court, 2012 Election?

Wednesday, February 1st, 2012

The 26 states that have challenged President Barack Obamas healthcare law face several dilemmas as they try to convince the Supreme Court to declare the law’s Medicaid expansion unconstitutional   The two lower courts that heard the Medicaid challenge ruled in favor of the Obama administration, even as those judges struck down the healthcare law’s individual mandate. Legal experts on both sides of the mandate debate were surprised that the Supreme Court agreed to also hear the Medicaid piece of the state’  lawsuit.  The healthcare law’s supporters claim that the states erred in their initial brief on the Medicaid expansion, which was filed with the Supreme Court.

According to the states involved in the lawsuit. the ACA’s Medicaid expansion is “coercive.” Although state participation in the program is strictly voluntarily, the brief argues, the healthcare law makes it impossible for states to opt out of Medicaid.  The brief tries hard to link the Medicaid expansion to the individual mandate, arguing that states won’t be able to exercise their legal right to leave Medicaid because it’s the only way for Medicaid-eligible residents to fulfill the mandate.

“While the (Affordable Care Act) purports to leave states’ participation in Medicaid nominally voluntary, multiple aspects of the Act evince Congress’ keen awareness that, in fact, no state will be able to reject its new terms and withdraw from the program,” the brief says. “Most obviously, the ACA’s individual mandate requires Medicaid-eligible individuals to obtain and maintain insurance.”  But most Medicaid-eligible people would be exempt from the mandate, said Timothy Jost, a law professor at Washington and Lee University and a supporter of the health law.

Then there’s the Supreme Court case, which will be heard in the spring and a verdict announced prior to the November presidential election. According to Kurt Mainwaring, a ksl.com contributor, “Far-reaching consequences of the court’s ruling will likely impact both the cost of healthcare and the outcome of the 2012 elections.  If the Supreme Court rules that ACA is constitutional, healthcare costs will likely continue to rise — although at a slower rate than if the law were determined to be unconstitutional.  At present, healthcare costs make up approximately 18 percent of GDP. If expenditures continue on their current trajectory, “the share of GDP devoted to healthcare in the United States is projected to reach 34 percent by 2040.”  Translated to real numbers, the Department of Health and Human Services (HHS) notes that Americans paid approximately $1,000 annually in healthcare costs in 1960; more than $7,000 per year in 2007; and are projected to pay more than $13,000 per year by 2018.  This kind of increase in healthcare costs is not sustainable — and these kinds of projections are part of the reason ACA was enacted in the first place.

Beach Conger, a Vermont internist writing in the Burlington Free Press believes that “Medicare for All” — a possibility that was raised during the lengthy debate over the ACA — should be reconsidered.  According to Conger, “Medicare and I were born in the same year. Professionally speaking, that is. We were raised together, and we have been married to each other for what seems an eternity. As with any long-term relationship, we have had our ups and downs, but we have both matured over the years, and I believe we are both the better for it. Without being too vain, I have to say I have done a better job at providing health care, and I have to admit that Medicare has helped me do it.  At first, it just made sure that those retired people who wished to pay me the fees to which those in my line of work have become so accustomed, could actually do so. But eventually it realized that there was more to the business than just money, and it began to keep an eye over my shoulder, making sure I was not leaving undone those things which ought to be done and not doing those things which I ought not.  So I can’t help but think, why not Medicare for everyone? It would be so simple. And that’s when I realized.  It was too simple.”

Dr. Conge, it should be pointed out, lives in Vermont, to date the only of 50 states to enact a single-payer public option — Green Mountain Care.

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MLK & Healthcare Reform

Monday, January 30th, 2012

A recent byline article in Forbes magazine by Carolyn McClanahan, M.D., CFP, raises many issues about healthcare in the year 2012.  According to McClanahan “The New England Journal of Medicine’s (NEJM) article on the fate of healthcare reform in 2012 greatly saddens the optimist in me. It discusses four important events, and I’ll share my “simplistic view” of these events:

“State legislatures getting in gear to fill their role assigned by the ACA.  As I’ve discussed previously, we have a complicated healthcare system which is expensive and inefficient.  Instead of simplifying, each state will implement or delay implementing the law based solely on their political interest.  This is not productive.”

“The second event is the Supreme Court’s ruling on the legality of the ACA in May. It is possible that the entire law could be struck down, (albeit unlikely).  If this scenario plays out, we will have wasted billions implementing parts of the law to date.  Another more likely scenario is the law will be upheld but the mandate that everyone purchase health insurance be thrown out.  This would severely weaken the law because people will only buy insurance when they are sick.  There will still be a requirement that insurance companies have to sell insurance to everyone regardless of health status.  This is not financially feasible.  Most likely, the law will stand, but who really knows?”

“The third key event is the deadline for states to apply for federal grants to operate their health insurance exchange.  State who don’t apply will either have to cede control of the exchanges to the federal government or pay for the cost of implementation themselves.  State governors and legislatures against the ACA, like my home state of Florida, risk turning away resources and having more of the federal government running the show.  Talk about the law of unintended consequences.”

“The fourth key date is the election in November.  If President Obama wins re-election, implementation will continue.  If he loses, the winner will have a difficult time repealing the law unless the Republicans can win 60 seats in the Senate.  So what is their plan?  Have everyone drag their feet on implementation or do a half-baked job.  Wouldn’t it be nice if instead they came up with a good plan to fix the parts that are not working?  Simplify and clean up the mess of the insurance part of the law and implement with speed and clarity the good parts like preventive care initiatives, rebuilding our primary care workforce, and improving our ability to handle large disasters.”

A similar viewpoint was expressed by Department of Health and Human Services (HHS) Secretary Kathleen Sebelius, who said that access to healthcare is the next civil rights frontier.  According to Sebelius, “On Martin Luther King Day, it is easy to congratulate ourselves on our progress in moving beyond segregated schools, lunch counters and drinking fountains. The hard question is this: what injustices do we still accept that should, in fact, be intolerable?  Surely Dr. King would find the next civil rights frontier in healthcare, with nearly 50 million uninsured, almost 45,000 deaths annually due to lack of insurance, and more than half of all personal bankruptcies linked to illness and medical bills.”

“While the Affordable Care Act will bring improvements, such as decreasing the ranks of the uninsured, supporting community health centers, and investing in prevention, it leaves many gaps. At least 23 million people will still be uninsured in 2019. Tens of millions will be underinsured, one serious illness away from financial ruin. Most people who suffer medical bankruptcy had private insurance before getting sick. And medical bankruptcy is a cruel double whammy. Already beset with pain, anxiety and fear – due to serious illness – families find themselves financially devastated.  This doesn’t happen in other industrialized countries, which have high-quality health systems that cover everyone.”

As a department, we are committed to ensuring that all Americans achieve health equity by eliminating disparities and doing what we can to improve the health of all groups, including the poor and underserved,” Sebelius said. “One of the most important ways we are doing this is through our new health care law, the Affordable Care Act.”

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Medicare, Medicaid Costs Rising More Slowly

Tuesday, January 24th, 2012

Healthcare spending nationally grew slowly for the second successive year in 2010, bringing it in line with growth in the U.S. economy as a whole, according to the Department of Health and Human Services (HHS).  Spending rose by 3.9 percent in 2010, to $2.6 trillion, while the GDP rose 4.2 percent, according to HHS, which published its findings in the journal Health Affairs.  In 2009, spending increased nearly the same by 3.8 percent, but in contrast it’s growth rate was twice that by 7.6 percent in 2007.  Spending increases frequently hit double digits in the 1980s and 1990s.  While spending growth in general remained slow, premiums for people in private insurance plans grew faster for the first time in seven years than what was spent on their care, according to the Centers for Medicare and Medicaid Services (CMS).  Premiums in 2010 rose 2.4 percent, slightly less than the 2.6 percent increase in 2009, although private health insurers’ spending on actual benefits rose only 1.6 percent in 2010, down from 3.7 percent in 2009.

Healthcare represents 17.9 percent of the U.S. economy, the same proportion as in 2009, according to a government report. “Persistently high unemployment, continued loss of private health insurance coverage and increased cost sharing led some people to forgo care or seek less costly alternatives than they would have otherwise used,” the report said.

The report showed that the federal government paid 29 percent of the nation’s healthcare bill in 2010, up from 23 percent in 2007. Some of that increase reflects a transitory increase in federal aid to states to enroll more uninsured people in Medicaid. The percentage of spending by private businesses and state and local governments fell.

The recession played a large role in impacting spending, CMS officials said.  Because fewer people were insured, and private insurers generally picked up less of the cost, patients went to the doctor and hospital less frequently.  The answer may go beyond the recession.  “The utilization slowdown is at least in part structural, and not just cyclically driven by the economy, and the adoption of higher cost sharing plan designs will result in some level of permanent slowdown in trend,” said Ana Gupte, a senior analyst at Sanford Bernstein, which conducts research for investors.

“Premiums grew faster than benefits for the first time in seven years, and benefits grew at their slowest rate in the history of the accounts, according to Anne Martin, a CMS economist.  Martin said this was because private health insurance companies lost enrollees as people were laid off, moved to cheaper health insurance plans as a result, cost-sharing increased.

Karen Ignagni, president of America’s Health Insurance Plans, said that the portion of premiums “allocated to health plans administrative costs was among the lowest in recent years, despite the fact that health plans have been in compliance with the healthcare reform law.”

Additionally, spending on prescription drugs declined in 2010.  Not only did individuals buy fewer drugs, but there were also more switches from brand to lower-cost generic medications. According to CMS, fewer new drugs came onto the market.

Paul Ginsburg, president of the Center for Studying Health System Change, a Washington research group, said the report didn’t address the biggest question: “When the economy gets strong again, do we just return to the old business as usual?  Probably,” he said. “But there’s a chance that the experience of people economizing may have longer-lasting effects.”

The Obama administration was pleased with the report and called it good news for the healthcare law, although some researchers found the law had a less than 0.1 percent impact on national health spending in 2010.  “These numbers do not take into account all of the cost-saving provisions in the Affordable Care Act that are still being implemented.  But they do show why the Affordable Care Act is so important,” senior White House adviser Nancy-Ann DeParle said. According to DeParle, the insurance regulations in the law will keep insurance companies “in check.”

The phasing in of the patient Protection and Affordable Care Act (ACT) which will expand insurance coverage to as many as 32 million people, will incur larger cost increases later in this decade. National health spending is expected to increase by 8.3 percent in 2014, when the most ambitious coverage expansions take effect, according to CMS projections.  “The law will control the growth of healthcare spending through fraud prevention, better coordination of care, disease prevention and overhauling insurance markets,” DeParle said.

According to DeParle, “Starting in 2011, insurance companies were required to publicly disclose and justify any premium increases larger than 10 percent. Many states have the authority to reject unreasonable premium increases and the Affordable Care Act gives states $250 million to strengthen their rate review programs. Additionally, insurers are required to spend at least 80 percent of your premium dollars on healthcare expenses instead of overhead and profits.”

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States Rewarded for Adding Kids to Public Insurance Rolls

Monday, January 9th, 2012

Twenty-three states will share $296.5 million in federal funds for encouraging low-income families to enroll children in state-run public healthcare programs.  The bonuses reward states that streamlined eligibility for Medicaid, the federal-state health program and the Children’s Health Insurance Program (CHIP).  The goal is to assure coverage for children younger than 19 from households with annual incomes of less than $45,000 for a family of four, though some states are more generous.  Despite 2011’s shaky economy, the number of uninsured children fell to 5.9 million in 2010 from 6.9 million the previous year, according to a study by the Georgetown University Health Policy Institute.  Children still leave the program rolls because parents neglect to renew eligibility, increasing the likelihood of missed vaccinations and dental checkups, said Tricia Brooks, a senior fellow at the Georgetown institute.

“Families may avoid routine preventive care with the hope they’ll have more money next month or delay seeking care until they know they really have to bring the children in,” Brooks said.  “At that point, the emergency room is a likely choice.”

Besides the 1.2 million newly insured children, three million who previously had private insurance transferred to CHIP or Medicaid during that time frame, said Sherry Glied, assistant secretary for planning and evaluation at the Department of Health and Human Services (HHS).  Because of that, children have been protected from 10 years of erosion of health insurance among Americans that resulted as employers dropped coverage, workers with insurance were laid off because of the recession, and people whose only alternative was to buy insurance on their own could not afford to do so.  Since CHIP was first established in 1997, the share of adults ages 26 to 64 with a health plan dipped from 83 percent to 80 percent. By contrast, in the same period, the share of children with insurance grew from 86 percent to 93 percent.  “It’s very encouraging, because it shows that even in an economic downturn, CHIP really made a difference,” Glied said.

The 23 states that are eligible to receive performance bonuses are: Alabama, Alaska, Colorado, Connecticut, Georgia, Idaho, Illinois, Iowa, Kansas, Louisiana, Maryland, Michigan, Montana, New Jersey, New Mexico, North Carolina, North Dakota, Ohio, Oregon, South Carolina, Virginia, Washington, and Wisconsin.

To earn their bonuses, states used electronic databases rather than paperwork submissions from families to verify incomes or preemptively enrolling kids who appear to be eligible.  Additionally, states may guarantee one year of eligibility rather than requiring periodic renewals.  Georgia and South Carolina use information from their nutrition assistance programs to hasten eligibility determinations, said Marilyn Tavenner, acting administrator of the U.S. Centers for Medicare and Medicaid Services.  In 2010, 15 states claimed bonuses totaling approximately $206 million.  Alabama, which received $55 million after adding 133,000 children to its public insurance programs, led the pack.

In Connecticut, for example, an estimated 49,000 Connecticut children under 18 have no health insurance, said Mary Alice Lee, senior policy fellow with Connecticut Voices for Children.  The state provides affordable insurance for children under the Husky Health program. According to Lee, considering that the state’s economic downturn and the 2010 nine percent unemployment rate, the fact that the percentage of uninsured children held steady means that the Husky program is working.  “The number of uninsured children in Connecticut is really relatively low compared to other states,” Lee said.  On a national basis, 9.8 percent of children under 18 were uninsured in 2010.  “The Husky program is doing exactly what it’s supposed to do, that is, provide affordable coverage for children during times of economic stress.”

No parent in America should have to think twice about taking their child to a doctor’s appointment or filling a prescription for their child because the cost is too high,” Tavenner said. “And no child should have to miss school or activities because they’re not getting the care they need to stay healthy.”  States have wide latitude regarding how they spend the funds, but the intent is that they will be used to help defray the shared Medicaid costs that the states incur by enrolling more children.

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States to Determine Their Own ACA Coverage Levels

Wednesday, December 28th, 2011

The Obama administration averted a potentially vicious lobbying battle over the medical benefits insurers must cover under the Patient Protection and Affordable Care Act (ACA) when it handed the decision to the states.  The ruling gives states the power to set coverage levels for the policies uninsured people will purchase through exchanges, starting in 2014.  Business groups will make a case for a narrow set of benefits to save costs while consumer advocates want expanded coverage.  The decision shifts the issue to the states and away from the White House, and lets President Barack Obama say he’s giving governors and legislatures greater flexibility to confront rising medical costs and control changes the 2010 healthcare law is bringing to insurance markets.

“Obama has taken all the grief he can stand over healthcare,” said Erik Gordon, a business professor at the University of Michigan in Ann Arbor.  “He doesn’t want it to give the Republicans any more political ammunition.  He is passing the hot potato to the states.”

“This is significantly more state-flexible and friendly than many would have expected,” said Alan Weil, head of the National Academy for State Heath Policy. What’s to guarantee that the state’s choice of a benchmark plan will be affordable?” asked National Retail Federation Vice President Neil Trautwein.  If coverage is unaffordable today, this doesn’t change the equation.”

Ron Pollack, executive director of Families USA, said Department of Health and Human Services (HHS) would have to provide “strong oversight and enforcement” of the benefit standards as the states implement them.  “It will be important to ensure that adequate coverage across all 10 required benefit categories is provided — marking an improvement over many plans offered today,” he said.  Giving states greater flexibility to determine necessary benefits was perceived as an attempt to defuse criticism that the health reform law gives the federal government too much control over the healthcare system.  A longtime advocate for federal health reform, Pollack also expressed reservations.  “We understand the inclination to balance flexibility, comprehensiveness of coverage, and cost,” he said. “However, flexibility must yield to reliable, comprehensive coverage of benefits for consumers.  It is essential that HHS provide strong oversight and enforcement.”

Under the revised guidelines, state legislature must either set coverage levels in line with widely subscribed small- business plans in their communities, or tie them to benefits included in their state employees’ health plan, federal plans or the largest commercial managed-care plan in the state.  Generally, health plans for small businesses, state employees and federal workers “cover similar services,” including doctors’ visits, hospitalization and outpatient mental health, according to a study conducted by HHS.  Discrepancies arise in areas such as prescription drugs.  While they’re covered as a basic benefit by all government employee plans, only 84 percent of small business plans cover them.  Others require additional premiums.  Small business plans also rarely cover dental care, acupuncture, bariatric surgery and hearing aids, unless states require it.

According to Forbes magazine’s sba.com column, “At a first glance, this seems like it might be a step in the right direction for individuals and small business owners.  However, that is not necessarily the case.  It seems as though the new idea comes with a wide array of new problems.  First, while the new policy will give states flexibility, it imposes more benefit mandates.  The new policy lists 10 ‘essential health benefits’ that the state MUST provide.  Some of these essential benefits are prescription drugs, preventative care, doctor and hospital services, and maternity care.  The new policy allows the states to designate a state-wide ‘benchmark’ health insurance plan, setting the minimum standard of care.  All insurers would then have the ability to change their insurance plans as long as the coverage provided benefits of the same or greater value.  The new ‘more flexible’ plan still seems very rigid and regimented.  Additionally, the new plan would lead to higher-cost insurance premiums, not lower.

“Another long-standing issue with Obama’s idea is that individuals are not clear on what services and benefits are expected to be provided as a minimum.  Instead of clearing up this confusion and spelling out what exactly would be required, Obama has simply put that responsibility on the states – giving them the ‘flexibility’ to design their plans.

“While it may look like Obama is responding to his opponents’ remarks about his previous plan forcing health insurance standards on states, it seems as though this policy change still accomplishes his goals – just through a different means.  Obama can continue to shape and reshape his ideals; however it will be up to the Supreme Court to decide whether the government can require Americans to buy health insurance at all.”

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ACA Gives 2.5 Million Young Adults Healthcare Coverage

Tuesday, December 27th, 2011

The number of young adults who have no medical coverage has contracted by 2.5 million since the Patient Protection and Affordable Care Act (ACA) took effect, according to a new analysis by the Obama administration.  That decline is 2½ times larger than earlier government and private estimates, which showed about one million Americans ages 19 – 25 had acquired coverage.

Obama administration officials said they now have more comprehensive data and are slicing the numbers more precisely than the government typically does, in an attempt to identify the impact of a popular provision in the law.  Thanks to the ACA, young adults can remain on their parents’ health insurance plans until their 26th birthdays.  Families have flocked to sign up their offspring, making the transition to work in a challenging economic environment a bit easier.

“Thanks to the Affordable Care Act, 2.5 million more young adults don’t have to live with the fear and uncertainty of going without health insurance,” said HHS Secretary Kathleen Sebelius.  “Moms and dads around the country can breathe a little easier knowing their children are covered.”

“This comparison makes it clear that the increase in coverage among 19 to 25 year-olds can be directly attributed to the Affordable Care Act’s new dependent-coverage provision,” according to an Assistant Secretary for Planning and Evaluation (ASPE) brief.  “Furthermore, the coverage gain for young adults was entirely due to an increase in private coverage (from 49 percent to 58 percent), with no change in Medicaid coverage during this period.”

“The increase in coverage among 19- to 25-year-olds can be directly attributed to the Affordable Care Act’s new dependent coverage provision,” according to the Department of Health and Human Services (HHS).  “Initial gains from this policy have continued to grow as…students graduate from high school and college.”

That age group previously recorded the highest uninsured rate. Now, 26- to 35-year-olds have that dubious distinction by a narrow margin, according to the Centers for Disease Control and Prevention.

According to the HHS survey, nearly 36 percent of Americans ages 19 – 25 — more than 10.5 million people — were uninsured in the third quarter of 2010, before the law’s provision took effect.  The majority of employer-based health plans began carrying the provision January 1, 2011.  By the 2nd quarter of 2011, the proportion of uninsured young adults had fallen to slightly more than 27 percent, or about eight million people.

And just who are these young adults?  Some are transitioning from school to work. Others are trying to start their careers by working at low-wage jobs that don’t usually come with healthcare coverage.  Some – known as the “invincibles” – pass up job-based health insurance because they don’t think they’ll need it and prefer some extra money in their paychecks.

Similarly, the National Center for Health Statistics has documented a broadly similar trend, only not nearly as spectacular.  According to administration officials, those statistics do not focus on the change from calendar quarter to calendar quarter, as the new HHS report does.  Instead, they pool data over longer time periods; that tends to dilute the law’s perceived impact.

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Berwick Laments Washington, D.C., Cynicism About ACA

Tuesday, December 20th, 2011

Dr. Donald Berwick, who recently left his job as administrator of the Centers for Medicare and Medicaid Services (CMS) because the Senate refused to confirm his nomination, struck back at his critics who had accused the pediatrician of advocating healthcare rationing.

“The true rationers are those who impede improvement, who stand in the way of change, and who thereby force choices that we can avoid through better care,” Berwick said.  “It boggles my mind that the same people who cry ‘foul’ about rationing an instant later argue to reduce healthcare benefits for the needy, to defund crucial programs of care and prevention, and to shift thousands of dollars of annual costs to people — elders, the poor, the disabled – who are least able to bear them.”

Although Berwick didn’t specifically accuse Senate Republicans, it was clear that he was referring to proposals to drastically slash the nation’s budget deficit by capping federal funding to states for Medicaid.  That proposal could cut billions of dollars that critics have said would lead to cuts in benefits.

During his 16-month tenure at CMS, Berwick studiously avoided using the term “rationing”.  Now, the gloves have come off.  “When the 17 million American children who live in poverty cannot get the immunizations and blood tests they need, that is rationing.  When disabled Americans lack the help to keep them out of institutions and in their homes and living independently, that is rationing.  When tens of thousands of Medicaid beneficiaries are thrown out of coverage, and when millions of seniors are threatened with the withdrawal of preventive care or cannot afford their medications, and when every single one of us lives under the sword of Damocles that, if we get sick, we lose health insurance, that is rationing.”

Berwick also jabbed at those who inaccurately said the Patient Protection and Affordable Care Act (ACA) included so-called “death panels.”  According to Berwick, “If you really want to talk about ‘death panels,’ let’s think about what happens if we cut back programs of needed, life-saving care for Medicaid beneficiaries and other poor people in America.  Maybe a real death panel is a group of people who tell healthcare insurers that is it OK to take insurance away from people because they are sick or are at risk for becoming sick.”

Going even further, Berwick said that the ACA needs more advocates supporting the law. “The law is just a framework,” Berwick said.  “Healthcare in America can improve and it can become sustainable without a tremendous amount of community involvement.”  President Obama has an important role in this, as do healthcare consumers who must push healthcare leaders to rethink the way they work.  “Increasingly, though, that advocacy role is falling to physicians, nurses, and hospital executives.  We need their voices, because they know the system can’t go on the way it is,” he said.

“I think that a lot of the public concern about that law and a lot of the congressional criticism is ill-founded and based on myths,’’ Berwick said.  “I think any chance to air publicly, with conversation and even debate, matters of such concern is healthy.’’

While contemplating what to do next in his career, Berwick said “I’m excited by how much is in motion in healthcare right now.  It’s an incredibly interesting and promising time with many risks, and I want to stay thoroughly engaged in reshaping American healthcare into the high-performance, sustainable system I know it can be.”

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Study Tracks Development of ACOs

Wednesday, December 14th, 2011

Accountable care organizations (ACOs) are the biggest thing in healthcare today, and a new study by Leavitt Partners quantifies exactly how hot they are.  ACOs, as defined in the Patient Protection and Affordable Care Act (ACA), are a delivery model that offers doctors and hospitals financial incentives to provide quality care to Medicare patients and keep costs affordable.

Even though ACOs are not yet operating, there are already 164 “ACO entities” in the country, according to a report by Leavitt Partners, a consulting firm led by Mike Leavitt, a former governor of Utah and Secretary of Health and Human Services during President George W. Bush’s administration.  In his survey of ACOs, Leavitt examined news releases, media reports, trade groups and conducted interviews and concluded that a health system is an ACO if it either self-identified as one or was “adopting the tenets of accountable care.”  The study included systems that work with private payers rather than Medicare.

Of the 164 “ACO entities” identified, 99 are sponsored by hospital systems, 38 by physician groups and 27 by insurers.  They are in 41 states, although there were vast regional discrepancies.  Poor, rural regions reported minimal ACO growth.

“A quiet scramble is clearly underway,” Andrew Croshaw, managing director at Leavitt Partners and director of the Leavitt Partners Center for ACO Intelligence, said.  “In certain markets, competition to establish leadership is already emerging.”

Due to the rush to complete the study, ACOs may be prolific in certain areas while sparse in some regions of the country.  Even though ACOs are still a new concept, certain states are already home to significant accountable care activity, primarily in Texas, California, and Michigan.  In general, states with larger populations have more ACOs.  “Adoption of this model will vary greatly due to both regional differences as well as variations among the sponsoring entities,” the report states.

Of the 164 ACOs that researchers examined, nearly 60 percent were established by hospitals or health systems, indicating a trend toward hospital systems leading the development of ACOs.  Leavitt Partners examined the trends of “ACO or ACO-like organizations,” meaning the report loosely defined an ACO as an entity that is “financially accountable for the healthcare needs of a population, manages the care of that population and bear that responsibility at an organizational level.”

The success of the various ACOs is still not known. According to the report, although there are different models of providing accountable care, the most successful approaches at achieving an ACO’s goals is still undecided.  “With neither a set definition, nor a national method for identifying ACOs, it is difficult to precisely identify and study such organizations,” according to the report.  “It is possible that some of the organizations, which should be considered ACOs, are missing from our study and some, such as organizations that self-identify as ACOs but will never ultimately adopt any type of care coordination or bear any risk for a population, may not belong.”

The final ACO rule provides more flexibility for eligible providers and increases the amount of possible bonuses.  The Centers for Medicare & Medicaid Services (CMS), which released the rule in October, also decreased the number of quality measures from 65 in five domains to 33 in four domains.  Although the full implications of the rule are not yet known, providers’ responses reflected their desire for long-term care to actively participate.  ”We certainly want to ensure skilled nursing and post-acute facilities are part of the cost-saving model,” according to the American Health Care Association President and CEO Mark Parkinson.

There are some who are not quite so bullish about ACOs. One is J. Thomas Rosch, commissioner of the Federal Trade Commission, who is deeply skeptical about ACOs.  According to Rosch, “even in the most optimistic scenario, the savings to Medicare from the ACO program are no more than a rounding error.”  He also believes that there is a possibility that providers may form ACOs not to collaborate or improve healthcare, but to gain market share.

“Against the very meager prospects for cost savings, there is a very real risk that some ACOs will be formed with an eye toward creating or exercising market power.  The net result of the Shared Savings Program may therefore be higher costs and lower quality healthcare — precisely the opposite of its goal,” Rosch said.

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HHS Awards State Health Insurance Exchange Dollars

Tuesday, December 13th, 2011

The Department of Health and Human Services (HHS) awarded nearly $220 million to 13 states to help them set up insurance exchanges under the Patient Protection and Affordable Care Act (ACA). States were also allowed additional time to apply for future grants while HHS stipulated that states who create their own internet-based exchanges must be operational in all states in 2014.

The recent awards bring to 29 the number of states that have made significant progress in creating Affordable Insurance Exchanges.  States that received funding include Alabama, Arizona, Delaware, Hawaii, Idaho, Iowa, Maine, Michigan, Nebraska, New Mexico, Rhode Island, Tennessee, and Vermont.  “We are committed to giving states the flexibility to implement the Affordable Care Act in the way that works for them,” HHS Secretary Kathleen Sebelius said.  “Exchanges will give consumers more choices and make it easy to compare and shop for insurance plans.”  In the new Exchanges, insurers will provide an easily understandable summary of benefits and costs to consumers.  The level of detail will hone competition between carriers, which is expected to make coverage more affordable.

It’s interesting to note that despite extensive opposition to the ACA, a majority of states have now accepted federal funding to establish health insurance exchanges.  Alaska is the only state that hasn’t applied for federal grants.

Of the 13 states that received this new round of grants, 12 are Level One grants, which provide one year of funding to states that have already made progress using their Exchange planning grant.  The 13th state, Rhode Island, received the initial Level Two grant, which provides multi-year funding to states that have made significant progress in the planning process.  Forty-nine states and Washington, D.C. have already received planning grants; 45 states have consulted with consumer advocates and insurance companies.  Thirteen states have passed legislation to create an Exchange.

The money is intended to provide the states with adequate flexibility and resources to deploy the marketplaces where consumers can shop and compare for a private health insurance plan that fits their needs.  The exchanges are slated to go live just two years from now.

According to Chiquita Brooks-LaSure, HHS director of coverage policy, “We continue to urge all states to establish their own exchanges and move forward with their implementation…while waiting for the Supreme Court to rule.”  The exchanges are a “bipartisan concept,” and states know that if they don’t establish an exchange by 2014, HHS will create one for them. She is “confident the law will be upheld.”  Sebelius said that as a former governor, state insurance commissioner and legislator, she understands “the importance of letting states lead” in creating their own version of a transparent healthcare system in which “insurance companies will have to compete for customers.  That means lower prices and better quality in the same marketplace in which members of Congress will have to shop for their coverage.”

The latest grants come nearly a month after the National Association of Insurance Commissioners asked HHS for greater flexibility in setting up the exchanges, suggesting state insurance commissioners might miss critical deadlines because they lack adequate funding and staff.  Additionally, HHS will delay by six months the deadline for states to apply for more federal funding to help run the exchanges.  HHS also will offer federal aid to states that miss deadlines.

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